EghtesadOnline: The Central Insurance company of Iran has assured agents and brokers that it will revise the newly-announced commission framework, they deem controversial, in a way that would benefit sales.
Risknews website later reported that the CII head has postponed implementation of the new rules.
Speaking at a meeting with insurance agents and representatives at Club House, Gholamreza Soleimani said the framework will be reviewed at a meeting of the High Council of Insurance, the top decision-making body of the key industry.
"As per law I cannot stop the implementation of the framework. However, I can assure you that it will either be modified or will completely put aside."
Last week the CII published the new framework, setting commission caps for agents and brokers selling insurance policies in the life and non-life categories. The new rule was to come into effect on Sept 22.
CII officials say the new setup should help increase income. But the agents say the new rates were decided without the necessary studies, Risknews reported.
"Agents do not accept the new rates. Those in charge have made the decision without soliciting our views. This format is likely to weaken the sales network," the Insurance Agents Union said in a letter to the CII.
Risknews' case studies show a steep decline in agents' earnings (almost 25%) when their commissions are calculated as per the new rates.
However, the number of insurance agents who registered annual growth of nearly 17% reached 64,000 by March 2019, according to the CII. The total number of branches of insurance firms across the country reached 1,258 by that tome -- up 6% --compared to the year before while the number of brokers increased 35% to 834.
Iran Insurance Company, the largest and only state-owned insurance company, has the largest sales network with more than 9,000 agents and 209 branches.
The privatized Asia Insurance Company is next with 3,200 agents and 100 branches. Pasargad Insurance Company ranks third with 73 branches and 2,700 agents.
The CII head says the sector needs to do more and expand the sales network. In a meeting last week he said the number of people working in sales network of insurance companies should increase to 400,000.
"To hire more people, insurance companies need to submit plans for managing their sales network," he said.
Insruance companies collectively generated 317.2 trillion rials ($1.16b) in premium in the four months to July 23. The mandatory third-party vehicle insurance remained the main source of income.
Insurers sold 6.96 million third-party auto insurance policies last year worth 113 trillion rials ($418 million), recording a 45.9% growth in value but 0.9% decline in policies sold.